Sharp contraction of credit by U.S. banks

One recent phenomenon many are experiencing on an individual and corporate level is creditors capping or cutting off lines of credit (if not previously committed). Turns out this is true and the most recent numbers show that in fact banks are pulling credit at a faster rate than at any time since the number has been monitored, i.e., the early 1970s.

“The latest report from the Fed of assets and liabilities of commercial banks in the U.S. showed the sharpest 13-week contraction in bank credit – loans and investments – in the history of the series, which dates back to January 3, 1973. In the 13 weeks ended June 18, bank credit contracted at an annualized rate of 9.14%.”